Welcome to the 17th installment of "Considered Forthwith."
This weekly series looks at the various committees in the House and the Senate. Committees are the workshops of our democracy. This is where bills are considered, revised, and occasionally advance for consideration by the House and Senate. Most committees also have the authority to exercise oversight of related executive branch agencies.
This week I'm examining the House Committee on Small Business and the Senate Committee on Small Business and Entrepreneurship. These are not the most glamorous committee assignments, but anyone who owns, plans to own, or works for a small business should pay attention.
Here are the committee members:
Democrats: Chairwoman Nydia Velázquez of New York; Dennis Moore of Kansas; Heath Shuler of North Carolina; Kathy Dahlkemper of Pennsylvania; Kurt Schrader of Oregon; Ann Kirkpatrick of Arizona; Glenn Nye of Virginia; Mike Michaud of Maine; Melissa Bean of Illinois; Daniel Lipinski of Illinois; Jason Altmire of Pennsylvania; Yvette Clarke of New York; Brad Ellsworth of Indiana; Joe Sestak of Pennsylvania; Bobby Bright of Alabama; Parker Griffith of Alabama; Deborah Halvorson of Illinois
Republicans: Ranking Member Sam Graves of Missouri; Roscoe Bartlett of Maryland; Todd Akin of Missouri; Steve King of Iowa; Lynn Westmoreland of Georgia; Louie Gohmert of Texas; Mary Fallin of Oklahoma; Vern Buchanan of Florida; Blaine Luetkemeyer of Missouri; Aaron Schock of Illinois; Glenn Thompson of Pennsylvania; Mike Coffman of Colorado
Democrats: Chairwoman Mary L. Landrieu (LA); John F. Kerry (MA); Carl Levin (MI); Tom Harkin (IA); Joseph I. Lieberman (CT); Maria Cantwell (WA); Evan Bayh (IN); Mark L. Pryor (AR); Benjamin L. Cardin (MD); Jeanne Shaheen (NH); Kay Hagan (NC)
Republicans: Ranking Member - Olympia J. Snowe (ME); Christopher S. Bond (MO); David Vitter (LA); John Thune (SD); Michael B. Enzi (WY); Johnny Isakson (GA); Roger Wicker (MS); and a Republican Leadership Designee to be named
Update: The final Republican member of the committee is James E. Risch of Idaho, per Senate Resolution 218, adopted by unanimous consent Tuesday, July 21.
Here is a plain language statement on the House Committee's jurisdiction:
(T)he House Small Business Committee is charged with assessing and investigating the problems of small businesses and examining the impact of general business practices and trends on small businesses. The committee has oversight and legislative authority over the Small Business Administration (SBA) and its programs, as well as provides assistance to and protection of small businesses, including financial aid and the participation of small business enterprises in federal procurement and government contracts.
And the Senate committee's jurisdiction:
- Oversight of the Small Business Administration
- Consideration of Non-SBA Legislation
Any proposed legislation reported by the Committee on Small Business and Enrepreneurship that relates to matters other than the functions of the SBA shall, at the request of the chairman of any standing committee having jurisdiction over the subject matter extraneous to the functions of the SBA, be considered and reported by such standing committee prior to its consideration by the Senate; and likewise measures reported by other committees directly relating to the SBA shall, at the request of the chairman of the Committee on Small Business and Entrepreneurship, be referred to the Committee on Small Business and Entrepreneurship for its consideration of any portions of the measure dealing with the SBA, and be reported by this committee prior to its consideration by the Senate.
- Study of American Small Businesses
Notice that the main function of the committee is to oversee the Small Business Administration. This is an independent Executive Branch agency with a substantial, though largely invisible, influence.
Small Business Administration
The American economy is very dependent upon small business. Here are some statistics from the Census Bureau on the sheer number of small businesses and the number of people who work for them. Almost all of the employers in the United States are classified as small business and about half of all American workers are employed by a small business. A small business is generally defined as having few than 500 employees and less than $7 million in annual receipts. More details on limits by industry are here.
These employers are also the most vulnerable to market fluctuations. While large companies like Walmart and Microsoft can ride out economic downturns, a few bad months or one ill-conceived business expansion can put the independent bookstore or small factory out of business. As a result, the federal government offers some support for those businesses and people considering starting a business. The main government agency to help small business is the Small Business Administration. Since both committees oversee this agency, this would be a good time to investigate further what exactly they do.
SBA was proposed by President Eisenhower in 1952 and established by Congress the next year. However, the roots of small business assistance go back the the Great Depression with the establishment of President Hoover's Reconstruction Finance Corporation (RFC) in 1932. RFC was a government lender for all businesses affected by the Depression. President Roosevelt saw value in the program and made sure the RFC was well funded and staffed.
During both World War II and the Korean War, the federal government set up similar programs specifically to help small businesses be competitive with larger corporations to supply war matériel. RFC was abolished in 1952 and many of its small business activities were taken up by the newly formed SBA. The agency later expanded to offering business advice as well as awarding grants and loans.
More history on SBA is posted here.
Today, SBA offers loans and grants to small business owners and potential small business owners for start up/expansion costs. Additionally, and probably more importantly, SBA offers expertise on all areas of business (including declaring bankruptcy). These are handled through regional Small Business Development Centers like this one and the volunteer SCORE program, which offers free counseling services from other business professionals.
SBA also has a number of programs to encourage and promote business owned by women and minority groups and handles some disaster assistance.
Here is another list of resources, courtesy of the Senate Committee website. Other assistance is available at your county (or parish because Louisiana has to be different) or city economic development organization.
The Senate Appropriations Committee recently reported the Financial Services Appropriations Bill, which would appropriate $697 million to SBA. This is an increase of $150 million over the last year of the Bush Administration and $22 million more than President Obama requested. More information here. The House version, meanwhile, provides $848 million, an increase of $236 million. The discrepancies will be worked out in conference committee.
I will leave it at that, but I would encourage any small business owners (including self-employed people) to explore these resources and see what might be available to you.
Other committee activities
The SBA is not the only responsibility of the committees and they have a few other things going on. There is not much in the way of upcoming hearings, but the House committee will hold a hearing called "Meeting the Needs of Small Businesses and Family Farmers in Regulating our Nation’s Waters" on Wednesday.
Here are a few other things that have been going on:
Economic stimulus program: Remember the hundreds of billions of dollars we spent to stimulate the economy? Well, there is some work going on with the two year plan to use the money. On July 15, the House Committee held a hearing to check on the progress within the small business community.
From the chairwoman's opening statement:
Six months after the Recovery Act was signed into law, the clouds are starting to clear. To begin, lending from the SBA is up dramatically. As of June, the agency had supported $6 billion in loans. Just as importantly, small business credit markets are coming back to life. Loan volumes in the secondary market jumped from under $100 million in December to $360 million last month. So things are looking up. Still, small firms continue to face challenges in accessing capital, and it would be wrong to say we are out of the woods just yet.
Small firms are already leading the Green Revolution. Increases in clean energy tax credits are helping that process along, and generating tremendous opportunity for small firms. In a recent survey by the Air Conditioning Contractors of America, 75% of respondents said they had seen improved sales. Because the efficiency sector is dominated by entrepreneurs, good news for green businesses is good news for small businesses.
I have not watched the full hearing, but the highlights are available on YouTube.
Physician shortage: Health care reform,
if when it happens will be irrelevant if there are no doctors to provide care. The problem is that general practice is not always lucrative enough to attract new doctors, particularly in rural areas. House Committee Chairwoman Velázquez had this to say in reaction to a July 8 hearing on the issue:
Velázquez noted that Democrats are already taking steps to help address the physician shortage. The American Recovery and Reinvestment Act (ARRA) sets aside $2.5 billion to expand community health centers and provide educational debt relief to get thousands of new doctors and health professionals into the field faster, especially in underserved and rural areas. Nonetheless, it was clear in today’s hearing that more would need to be done to further incentivize doctors to practice medicine in those fields facing a workforce shortage.
Health care reform and the small business: The cost of health care is a particularly large concern for small businesses, particularly to the 22 million (out of 27 million small businesses) that are self employers. These are the people who start their own businesses with no employees and need to worry about health care coverage along with all of their other concerns. Between 2001 and 2008, health care premiums for the self employed increased by an unsustainable 74 percent. The Senate Committee examined this issue on July 9.
From chairwoman Landrieu's opening statement (pdf link)
Small businesses need: stable coverage that cannot be taken away; stable, affordable costs that will not increase without warning; and stable quality that assures the proper treatment is always within reach. Simply put: We need to reform our health care system to provide small businesses the opportunity to grow and prosper. The cost of doing nothing is just too great.
A link to watch the hearing is here.
I'm not entirely sure what the small business committees can directly do about this issue, but the fact that these Senators are aware of the health care issues within the small business community means that they should be cognizant of these issues during the eventual floor debate and amendment process.
Rural broadband Internet access: Another piece of the stimulus/recovery program is to spend $4 billion on improving broadband internet. This is being done through the Commerce Department and more information is available here. The deadline to apply for funds in Aug. 14. Here is Chairwoman Landrieu's statement on the program. If you are stuck with dial up internet, contact the nearest cable company and urge them to apply for the money.
For anyone lost on what I am talking about, here's the deal. In a city or town, a few dozen feet of cable can provide television and Internet service multiple customers. Therefore it is cost effective to provide cable and high speed Internet there. In rural areas, a cable company might have to run several miles of cable and poles (and do the maintenance on them) to serve a handful of -- or even one -- customer(s). Even if that happens, there are no guarantees that those customers will sign up for service anyway. That is not cost effective. This program would at least put the infrastructure in place and give residents of rural areas access to this digital playground and potential money-making tool the rest of us enjoy.
It may or may not be related, but Chairwoman Landrieu's state has a town that finally got basic phone service in 2005. To illustrate the expenses involved in such a project, the cost to provide 15 homes with phone service was $700,000.
I think it is a good idea to take a peek at what the Republicans are saying on their sites. On the House minority site, the latest post is spinning the July 15 hearing as a failure by President Obama and Speaker Peloisi. A tax hike on the wealthiest people to pay for health care reform will doom small business. Moreover, the recovery has not yet resulted in new jobs, therefore, it is a failure of epic proportions. Never mind that these things take time and the situation might be even worse without the recovery/stimulus money.
On the Senate minority site, Ranking member Snowe is complaining that the government has not cut energy taxes enough. She might have a point because the Republicans are looking for tax cuts to encourage more energy efficiency and green technologies. Credit where it is due, I suppose.
The Senate Committee does not have subcommittees. All of these subcommittees are under the House Committee. I could not find formal statements of jurisdiction, so we only have names and member, which are listed here. The subcommittees are:
Finance and Tax (Kurt Schrader, Chair and Vern Vern Buchanan, Ranking Member)
Contracting and Technology (Glenn Nye, Chair and Aaron Schock, Ranking Member)
Regulations and Healthcare (Kathy Dahlkemper, Chair and Lynn Westmoreland, Ranking Member)
Rural Development, Entrepreneurship and Trade (Heath Shuler, Chair and Blaine Luetkemeyer, Ranking Member)
Investigations and Oversight (Jason Altmire, Chair and Mary Fallin, Ranking Member)
That's it for this week. We are getting close to the summer recess, so there probably won't be much going on in the committee in the near future. However, I am soliciting suggestions for next week's installment.
For more about other committees, check out my previous work:
Senate Environment and Public Works Committee
House Select Committee on Energy Independence and Global Warming
The Committee Primer
House Education and Labor Committee
Senate Finance Committee
Senate HELP Committee
Senate Judiciary Committee
House Energy and Commerce Committee
House Ways and Means Committee
House and Senate Appropriations Committees
House Intelligence Committee
House Judiciary Committee
House and Senate Ethics Committees
House Science and Technology Committee
House Financial Services Committee
House Rules Committee
The Role of Committees